Labor Pains: How Bad Are They?

After furloughs, layoffs, and the overall beating hotels took during the first 24 months of the Covid pandemic, many experienced workers have no intention of returning to the hospitality industry, according to various surveys. And the combination of rising wages across all industries, along with the dearth of service-sector job applicants, is making it especially difficult for hotels to be fully staffed.

“Those responsible for operating hotel assets in the U.S. universally agree that labor [and] workforce issues are the number-one challenge facing the industry,” Scott Berman, the hospitality leader at PwC Principal, said in this article on ThePointsGuy.com. “There are still major gaps across the operating model that are impacting service delivery.”

In January, following a lackluster Bureau of Labor Statistics report on hiring that showed the leisure and hospitality sector added only 53,000 jobs, U.S. Travel Association executive vice president Tori Emerson Barnes expressed concern. And while the February number rose to 179,000 new jobs added, the leisure and hospitality sector remains 1.5 million jobs short of pre-pandemic levels.

“The monthly job reports reflect an uneven recovery for the sector,” Emerson Barnes said. “The small gains made are not enough to propel the sector toward a larger recovery, as more than nine percent of all hospitality and leisure jobs remain lost.” In fact, hospitality and leisure still accounts for 73 percent of all jobs not yet recovered across the U.S., according to the Bureau of Labor Statistics.

And even for the jobs that are available in this business, “it’s not just competition between hoteliers but also with other industries for the right talent,” says Michael Grove, COO of hotel-market analysis firm HotStats. “Hotels are positioning themselves in a much different way” to potential employees in order lure those who can deliver acceptable customer service.

Jan Freitag, national director of hospitality analytics for U.S. CoStar Group (in photo), expects meeting planners to pay a price for the labor conundrum. “Hotels are having trouble finding front-line staff, leaving assistant general managers and general managers to help with those duties. As a result, many of them are looking for new jobs too. While that reduced headcount should be a cost-saving for hotels, it might also lead to service disruptions and poor guest-satisfaction scores. Operators know they need to attract and retain talent with better benefits and pay, so they’re adjusting wages. Those higher costs likely will mean that planners have to pay more."

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Other articles in this series on the supplier-labor crisis:
Help Wanted: Can Supplier-Staff Shortages Derail Events?
F&B Problems: Waiting for Waitstaff